Aussie Weakens Toward Two-Month Low Before China Trade Report
The Australian dollar fell toward its weakest level in two months before a report forecast to show import and export growth slowed in China, the South Pacific nation’s largest trading partner.
The so-called Aussie slid versus the yen ahead of jobs data tomorrow projected to show Australia’s unemployment rate remained at its highest in more than three years. The Reserve Bank of Australia cut its benchmark interest rate to a record low yesterday. New Zealand’s dollar also weakened versus Japan’s currency after central bank Governor Graeme Wheeler said the kiwi was “perhaps significantly overvalued.”
“The pressure is certainly on the Aussie after yesterday’s rate cut, not very inspiring domestic data and the potential for weaker Chinese data,” said Derek Mumford, a director at Rochford Capital, a currency risk-management company in Sydney. “Bounces will be limited to about $1.0270.”
The Australian dollar slipped 0.1 percent to $1.0177 as of 10:02 a.m. in Sydney after yesterday touching $1.0155, the least since March 4. It fell 0.3 percent to 100.58 yen.
New Zealand’s currency traded unchanged at 84.57 U.S. cents and weakened 0.2 percent to 83.58 yen.
China will probably report that exports rose 9.2 percent in April from a year ago, after gaining 10 percent in the previous month, according to the median estimate of economists surveyed by Bloomberg News. Imports increased 13 percent after a 14.1 percent gain in March, the poll shows.
Australia’s central bank lowered the benchmark rate to 2.75 percent and said it had decided to use some of the scope it has to reduce borrowing costs.
New Zealand’s central bank today said the nation’s largest banks will be required to hold more capital against risky home lending because rising property prices may be “problematic” for the financial system.
To contact the reporter on this story: Candice Zachariahs in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story: Rocky Swift at email@example.com